AT&T Announces $39 Billion Acquisition of T-Mobile
Today, AT&T, the second largest U.S. Carrier behind Verizon Wireless, announced it has closed a deal to purchase T-Mobile USA from Deutsche Telekom for $39 Billion. If this deal is approved by regulators, AT&T would easily become the nation’s largest carrier with a whopping 128 million subscribers by adding T-Mobile’s 33 million to its current base of 95 million.
This comes as a surprise to many in the industry, as rumors positioned Sprint as the likely suitor for any T-Mobile sale. In hindsight however, this deal makes a lot of sense. For one, AT&T and T-Mobile both utilize the same technologies for 3G (GSMA) and 4G (HSPA+). This will make for a smoother infrastructure integration and would allow AT&T to actually start offering working 4G service via T-Mobile’s HSPA+ network.
The deal would also open up T-Mobile’s subscriber base to the iPhone 4 and other Apple products like the recently released iPad 2, which AT&T has the right to sell and T-Mobile does not. On the flip side of course, is the fact that AT&T would also gain a number of great Android devices to bolster its product portfolio as it deals with the loss of exclusivity of the iPhone 4 to Verizon. Some of these phones include the Samsung Galaxy S 4G, the LG Optimus T, the myTouch 4G, and upcoming Android 2.2 SideKick.
The biggest issue regulators are sure to scrutinize will be the fact that T-Mobile offers some of the lowest rates in the industry while AT&T offers some of the highest. Will this mean that current T-Mobile subscribers will be looking at higher phone bills in the future? Will carrier charges rise across the board as the market is consolidated into only 3 national carriers?
These are but some of the questions that regulators and customers alike will be asking themselves as they deal with the after effects of an acquisition that is sure to completely transform the mobile landscape.